Brent Rises to $115.43 as U.S. Warns Iran Strikes Could Resume
Key Facts
Brent futures rose $1.55, or 1.4%, to $115.43 a barrel at 1:46 p.m. Eastern time on Wednesday, October 28, while U.S. West Texas Intermediate crude rose $2.92, or 2.9%, to $102.82 at the same time, according to Reuters. The move came as concerns about disruptions to Middle East energy supplies resurfaced, amid continued fighting in Yemen, an attack on a Saudi refinery and the possibility that the United States could strike Iran after the midterm elections. U.S. officials told several Middle Eastern countries and regional allies to prepare for the possibility of renewed military action against Iran after the elections, according to diplomats briefed on the matter. The Associated Press said Washington also warned of a possible Iranian response. Trump had not made a final decision on carrying out new strikes, according to the diplomats cited by the agency.
Brent’s gains returned the contract to overbought territory for the fourth time in five days, Reuters reported. EL7 closing data show Brent settled at $115.32 a barrel on October 28, compared with a close of $113.88 the previous day. WTI also closed at $102.78, versus $99.9 on October 27. These daily closes differ from contract prices recorded during trading, as well as from the prices and percentages cited in the initial draft. The closing data show both crude benchmarks rose between the two days, while Reuters said Wednesday’s move was linked to supply concerns in the region.
The potential military campaign could last several days, the diplomats said, while regional officials prepare for the fighting to drag on because of a response from Iran and allied groups. U.S. officials warned allies that Iran’s response could include strikes on energy facilities and other critical infrastructure. Those concerns place energy facilities in the region among the scenarios officials are monitoring, alongside the possibility of a widening confrontation. The Associated Press reported that Iran-backed Houthis had attacked Saudi oil facilities and airports, and that a Saudi-led coalition responded with strikes on areas controlled by the Houthis in Yemen. Reuters also cited continued fighting in Yemen and the attack on a Saudi refinery among factors linked to supply disruption concerns.
On military movements, the United States deployed the aircraft carrier Theodore Roosevelt and amphibious ships carrying Marines toward the Gulf, as part of a buildup of about 9,000 troops, according to the Associated Press. A U.S. official said the deployment could raise the U.S. naval presence in the region to more than 20,000 sailors and Marines, in addition to hundreds of aircraft. The moves come as a decision on new strikes remains unresolved, according to the diplomats who spoke to the agency. The estimated cost of the war to U.S. taxpayers has also reached $47.1 billion, according to the latest estimate the Defense Department submitted to Congress and the Associated Press reported. That figure adds a financial dimension to the military developments being discussed ahead of the midterm elections.
Trump said at a rally in Lubbock on October 27 that a decisive end to the eight-month conflict could come "in about two weeks, if you don’t mind," adding that the war would end "whenever I want it to," and stressing that Iran must not have a nuclear weapon. The UAE Foreign Ministry, meanwhile, urged the parties to "act wisely and seek political solutions" to contain tensions and prevent a return to large-scale operations. Iranian Foreign Minister Abbas Araqchi said Tehran "continues to give diplomacy a chance to succeed" and is reviewing ideas it had included in an earlier proposal to return to a ceasefire. The statements put the diplomatic track alongside military threats and warnings, without settling the course of the confrontation. The reports did not specify when a U.S. decision on strikes might come next.
International Energy Agency forecasts provide a backdrop for the oil market this year and next: in its October report, the agency forecast average global demand would fall by 2.6 million barrels per day in 2026, followed by a partial recovery of 2 million barrels per day in 2027. On supply, the agency estimated the average would reach 100.7 million barrels per day in 2026, a projected annual decline of 5.8 million barrels per day, before rising by 7.7 million barrels per day in 2027. The agency said its members had released about 330 million barrels from stocks through October 15 and agreed to complete the release of about 100 million barrels remaining. Plans also included releasing more than 20 million barrels of diesel as soon as possible and encouraging members able to increase oil and refined-product output to do so. Price movements amid these forecasts also remain tied to the course of regional tensions and supply risks highlighted in Wednesday’s reports.